Myth #4 – Bidding against the house?
Do some buyers fear that they are bidding against the house?
Do you find that some buyers fear that they are bidding against the house or are rigged?
Yes, buyers do have this fear and it is a fear that every auctioneer has to deal with. I think this fear may be more prevalent in the online only auctions where the buyer is not looking at the other buyers when they bid.
An auctioneer may have the right to bid for a seller up to the reserve amount of the property if this is disclosed in the terms and conditions of the auction. Once the reserve amount is met then the auctioneer should stop bidding. In an absolute auction the auctioneer should never bid. The practice of auctioneers bidding has turned a lot of buyers against the auction method. I disagree with an auctioneer bidding for a seller. The majority of our auctions have a reserve. If the reserve amount is not met the seller still has the option of accepting the bid. This is the sellers right.
It is my job as an auctioneer to make sure my seller is educated about the market and has a realistic reserve set on the property. The reserve is specified in the listing contract between seller and auctioneer. Some reserves are disclosed and others are not, this varies depending on the property and the seller. I tell the buyer to ignore the reserve amount and bid to where they are comfortable.
If a seller does not have a realistic reserve then we will pass on the auction. My saying is that I do not need practice, meaning that if I do not feel that the reserve is realistic then I will not take the auction. Buyers learn that our auctions will be priced in a realistic fashion and they will follow our auctions because of this fact.
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